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considered beauty businesses a high risk so
for many spas and salons standard finance
deals have been very expensive, if available
at all. The next option is rental/purchase
plans; these have good tax benefits but
traditionally have required a high deposit
and a high balloon payment at the end of the
rental term to own the equipment outright.
But the finance landscape is changing,
and many of our equipment and technology
suppliers are now able to offer various
financing options to suit your particular
business, capital available and cash flow.
For the sake of this exercise we are going
to use a financing model that many of our
trusted industr y equipment suppliers are
using within their options.
If you attend the expos you would have
seen the RentLite banners on equipment
and technology stands. The financiers
behind RentLite know our industry and
are working hard to deliver a financing
solution that will solve the finance
availability problems many aesthetics
businesses face and importantly, make the
purchase quick and easy.
Their system involves structuring the
loan as a rental purchase plan, no up front
deposit, and only a $1 payment to own
the equipment outright at the end of the
term, all documented before you sign. The
application process is very easy, no long
forms to fill out, the finance company uses
the bank account analysis method which
they access ‘behind the scenes’, so no
turning up to the lender with your bank
statements any more. The terms are good
if you want to sell the business, only a small
admin fee to pass the term onto the new
purchaser (when approved), or if paying
out early, again all ok for a small fee.
Rental payments are fully tax deductible,
and your accountant can claim the GST
on the payments. Of course, the ease of
the system makes it not the cheapest way to
purchase equipment but once you have had
your accountant or bookkeeper do the sums,
deducting the taxation benefits from the
‘ interest’ cost over term will give you exactly
the price you are paying and you can weigh
that up against the profit you will make from
the treatments in the same period and the
value of the asset once owned outright.
So, presuming those figures are positive
for you. How can you be confident that
you will perform the required number of
treatments over time and make the right
amount of profit to, at least, cover the cost
of the machine, and hopefully a lot more,
so that the machine is well earning its
weight before it is fully paid for?
SELLING THE NEW
TREATMENTS
You know your business; you would not be
buying this particular piece of equipment
if you were not confident that your client
base, or a new client base you are targeting,
would want the treatments. When new
treatments are first available everyone is
excited – you, the staff and the clients, it is
an easy time to make sales, but how do you
keep up momentum?
Very few professional aesthetics
treatments are a ‘one off ’. Almost everything
that we do is recurring, or program based,
for best and ongoing results.
As customers ourselves, many of us
know how easy it is to make a decision and a
commitment to something we need ongoing
for face or body, but then life gets in the way
and that commitment gets watered down
until we are not following the ‘plan’ at all.
As a business, you have just committed to a
rental / repayment program for your new
treatment technology, how do you protect
yourself and ensure that your precious
clients don’t fall off the page and not
continue the programs they committed to?
The answer is, you sell them a full
program from the outset while their
motivation is high and have them finance
their treatment program in the same way
that you just financed the equipment. Close
the cash flow circle.
ENTER HEALTH AND BEAUTY
PAYMENT PLAN SOLUTIONS
With A Health and Beauty Payment Plan
(H&B), the solution is that the client
enters into a week ly, fortnightly or monthly
payment plan agreement to pay H&B for
the full value of the treatment plan with
your business, and H&B pays you, and most
importantly, will guarantee to pay you.
If you choose not to enter into client
pay ment plans above the ceiling amount,
then you are guaranteed the full amount of
ever y payment plan you enter into with your
clients via H&B. Pretty good plan.
So this is how you can close that cash
flow circle, all you have to do is make sure
you sell enough treatment programs to
cover the cost of the rental, and ideally,
cover the additional treatments costs and
make a profit.
Selling programs and not single
treatments is an art form in itself in our
industry but with this payment solution
option it should be a lot easier, the client
enters into the agreement while they are ‘all
fired up’ about their aesthetics or wellness
solution and because the agreement is
made with a payment plan company, and
not a beauty prov ider, their commitment
to pay for and realise the full program is
considered locked in. And in reality is,
because it is with a payment plan company.
The lovely Guillaume (Gary) Bosert,
national sales manager for France Medical,
distributors of the world leading LPG
Endermologie treatments puts it this way
(after we converted his delightful French-
English to Aussie): “When it comes to
investing in equipment, most beauty salon
owners think ‘cash flow’ because their first
reaction is to look at the upfront price.
That’s the trap; the solution is you have to
finance your device. When you purchase
equipment, you are not buying a car, a
house, or home furniture. These personal
assets are not generating profit; they are
just a cost. When you purchase a dev ice
for your business, your primary goal is to
develop your profit, so that this new asset
w ill pay for itself.”
“ Whatever the cost of your device, low
cost or expensive, if you have few clients to
pay it off, it will take time to have a return
on investment. So be smart and look at the
monthly repayment and the average profit
you are going to generate each month.
Let’s take an example; you are purchasing
the Cellu M6 Endermolab from LPG for
cellulite treatments. The first question
you have to ask your account manager
is the average price per session and how
many sessions you need to perform a full
treatment. These t wo elements will help
you build the treatment package price list.
In this device example just one new client
a month will generate enough profit to pay
off the monthly repayment. “
Guillaume continues: “When you show
your clients before and after pictures they
will want to buy a program, my advice is to
give the mission to a company specialising
in payment plans like Health and Beauty
that is going to take the risk for you. Of
course, you will pay a fee, but the good
aspect is that there will be no more money
relations between you and your client. The
ease of the solution (H&B make it very easy
for both you and the client: Ed.) will help you
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